Net Worth Explosion

Net Worth Explosion

Net Worth Explosion

Hello everyone! Thanks for checking out The Green Swan.  Since I started this blog in March 2016, I’ve certainly learned a lot.  And I’ve definitely grown to appreciate all the hard work it takes to build a blog.  At this point I feel I owe my viewers a bit more transparency into my net worth and what it has taken to get here.  So let’s check out The Green Swan’s Net Worth Explosion!

I understand that readers want not only great content, ideas to improve their personal finances, and actionable steps to reach financial independence and early retirement.  But it also helps to understand the source.  I want you to know that the topics I write come from experience and significant research.  And you can trust it because I’ve lived it.  The Green Swan is a lifestyle, it has worked for my wife and I, and it can work for you.

Along my life journey, I’ve looked to maximize net worth.  My goal was to try and double my net worth every four years and to keep that up as long as possible.  Granted that is relatively easy early on given the law of small numbers.

How did I choose a goal of four years?  There was not a whole lot of science behind it.  I knew that if I could average an 8% return on my investments that would correlate to a “doubling time” of nine years.  Using the Rule of 72, you can determine the doubling time by dividing 72 by the expected return or divide by a target number of years to determine the required portfolio growth.  So nine years was the baseline given the expected long-term portfolio return of 8%, and to shrink that to four years I would have to make significant ongoing contributions into my portfolio.  And the contributions would have to increase each year to keep doubling every four years.

The fact that my ongoing contributions would have to keep increasing over time translated to another goal: to make more money year after year by growing, learning and advancing my career while continuing to live a frugal life.

So there it was, my goal of doubling my net worth every four years.  How have I done?  Let’s take a look.  Below is a chart mapping our combined net worth over the last 10 ½ years.

Net Worth Explosion

  • Starting in 2006, with a net worth of approximately $60K, it took us 2 2/3 years to double and reach $120K (around August 2009).
  • To reach $240K, it took another 2 years (around August 2011) thanks in part to a strong uptick in the markets.
  • To reach the next doubling point of $480K it took 1 2/3 years (April 2013) attributable partly to a good stock market and also a continued ramp up of our salaries (and therefore more cash to invest).
  • And most recently, in March 2016, we reached $960K which was the next doubling point.  This took right around 3 years.

The growth in our net worth is attributable to The Green Swan lifestyle.  We’ve both successfully advanced our careers which has led to decent increases in our take-home pay year after year.  I graduated with my MBA in December 2010 which led to a new job opportunity and a significant increase in pay in the following years.  This has all culminated in a major milestone my wife and I just reached, in April 2016, of having a net worth over $1,000,000!

We’ve kept our lifestyle inflation in check.  Meaning even though we have had increases in our take-home pay, we have maintained a relatively low cost of living.  It is not as though we still live like college kids, we are very comfortable, but we have always managed our expenses very closely.

And lastly, the markets have cooperated, more or less.  We have invested in an all stock portfolio.  It definitely took a hit in the ’08 economic recession, but we powered through, continuing to contribute more money (buying low at that time) and benefited when the market rebounded the next couple years.

We have successfully doubled 4 times, all in less than four years so our goal remains intact.  This next “doubling time period” may prove more challenging given the significant jump we will have to make and I’m not so certain our salaries (and investment contributions) will continue to climb as fast as they have in recent years.  It may eventually take 5 or more years, but do not count us out yet, we are trying hard and hoping the markets continue to cooperate.

The Green Swan Book Release

Our “Net Worth Explosion” is the product of The Green Swan lifestyle at work; all Three Key Principles.  It is time to make it work for you too and I hope you continue to read The Green Swan to help you reach financial independence and early retirement.  To help you become well rounded in The Green Swan lifestyle, check out The Green Swan eBook.

The Million Dollar Club

The Net Worth Explosion now puts The Green Swan in The Million Dollar Club!  Never heard of The Million Dollar Club?  Well check out J$’s site “Budgets Are Sexy”.  He started The Million Dollar Club for all those who wish to one day be a millionaire (you don’t need a million to join).  As part of being in the club, I will post my Pledge later in the week.  Going forward, I will proudly display The Million Dollar Club Seal on my homepage!

Net Worth Explosion: Million Dollar Club Seal

Let me know what you think of the “four year goal”.  Do you have a “doubling goal” of your own?  Did you set goals initially and stick with them or adjust over the years?  If you have your own goal, please share in the comments below.

Thanks for taking a look.

The Green Swan

Work Harder, Work Smarter, Retire Earlier and Find Your Beach

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Apathy Ends

Wow that is impressive, and congrats!

I like your doubling approach, I have not set any goals around net worth to date (have goals set for pretty much everything else).

The next double is going to be a big one! Good luck and post updates!

JW

Thanks! I like the four year goal, it’s tough to keep meeting but it allows you to envision where you’ll be in a few years if you keep meeting it. And it serves as a short-term and long-term goal since it keeps resetting.

No doubt the next one will be tough, but I thought that the last time too! The challenge will be contributing more and more if my salary starts to plateau. We’ll see. I’ll keep you posted.

The Green Swan

Stefan - The Millennial Budget

Wow you really accelerated your net worth quickly! Congrats on getting to this very prestigious club!

The markets as well as salary increases have definitely helped accelerate your goals. The next doubling will definitely take a bit longer but I am sure you will achieve it!

JW

Thanks. I definitely feel fortunate to have gotten my career to where it is today (same goes for my wife) and it has taken a lot of discipline to keeping expenses low as well. And then it has just been a matter of letting the markets do their thing. Still not quite to financial independence though so have to keep chopping wood there.

The Green Swan

Believe Fire

Congratulations on reaching the $1 million milestone! The rapid growth of your net worth is a great testament to the “Green Swan Lifestyle.” I’m sure you’ll continue to surpass your goals.

Our goal is to be financially independent. We’re currently traveling the world to scout affordable retirement places. Once we’ve determined where we are going to live, we will either be retired, or at least know how much more we need to accumulate.

-J&D

JW

That’s a great idea, to scout out your retirement spot. My wife and I have thrown around ideas, but nothing serious since we aren’t too close on ultimately pulling the trigger. I’d be interested to hear where you folks end up picking.

The Green Swan

Martin - Get FIRE'd asap

Great article Green Swan. I’m currently working on something similar giving my readers the inside on where I’m at and how I got there. As you say, this gives your audience the warm-fuzzies knowing that you have been there and done that. It’s all about credibility isn’t it. Pretty impressive growth though. Now you can tell people you’re working on your second ‘mil’. I’m interested to know why you chose to invest so heavily in the stock market rather than diversify your portfolio a bit more. Do you have a lot of stocks experience or was it something that you have a real interest in? Do you own your own stocks or do you use ETFs as well?

JW

Yeah I agree, it’s nice to have a bit of transparency. Ha and yes, I’m going for the second ‘mil’ now!

That’s a good question. It is on my to do list to put together a post on my investment rationale. I will try to do that soon to explain further, and my forthcoming book goes into a lot of detail as well.

High level though, I am comfortable in an all-stock portfolio because of my long investment horizon and belief that its historically superior returns will continue over the long term. I don’t have much history or experience necessarily, just a passive interest in it and I took a few classes for my undergrad and grad degrees. And since that is about the extent of it, I don’t have the confidence in myself picking my own stocks (nor the time to invest in researching etc), so I rely on mutual funds (primarily index funds). My general investment weighting is 30% small cap, 30% large, and 40% international. Hope this helps give you a little more explanation on that front, but I promise I will go into more detail in the future. I also hope you are interested in checking out the book once it’s published!

Thanks again for the question.

The Green Swan

Martin - Get FIRE'd asap

I too tried picking my own stocks and failed miserably. Lucky I didn’t invest too much at the time as my ‘portfolio’ if you can call it that, is now worth about 40% of what I invested :-(. This just proves the majority who say that most of us won’t beat the market average so now I leave it up to Vanguard to manage my share portfolio. Yeah, looking forward to the book. I’d like to do a review on it for my site if that’s ok with you.

JW

Yeah good plan. I don’t necessarily need to beat the market, average returns will suit me fine.

I’d love it if you did a review of my book on your site, thanks for the offer! Hopefully it’s good! 😉

The Green Swan

JW

Thanks Mr. SLM! Congrats on being close to 7 digits yourself, big milestone. I look forward to hearing your updates!

The Green Swan

Felicity

Wow, finishing a book is huge – well done! I mean, a million dollars is nothing to sneeze at, but writing and editing and then publishing an entire book?? I’m honestly more impressed by that 😀

FinanceSuperhero

This is my favorite of your articles to date! Kudos to you for your accomplishments -net worth and the new book- and your transparency.

I like the concept of the “four year goal” and may adopt it myself. In a few more months, Mrs. Superhero and I will be poised to ramp up our investing significantly, so I will keep it in mind as I begin writing short-term, mid-range, and long-term targeted goals.

One question: When you say “all stock portfolio,” do you mean single stocks? Are you managing the portfolio yourself?

JW

Thanks Finance Superhero! The four year goal is tough but definitely worth incorporating into your goals.

Thanks for the question and allowing me to clarify, by all stock I simply mean equities, and more specifically mutual funds. No single stocks (except I have some stock from my company-not the smartest decision I know but it isn’t too much and I’m willing to live with that risk for the time being) and I don’t manage it myself. It’s about 2/3 index funds and some actively managed with a mix of small cap, large cap and international (30 / 30 / 40).

I’ll definitely be going into more detail on the investments in the future.

Thanks again and glad you liked the post!

The Green Swan

Financial Slacker

Congratulations. Hitting the $1 million net worth mark is a great achievement.

I’m guessing that as your net worth continues to grow, you will find that the doubling period shortens. The more money you have, the more opportunities to invest it. But obviously, market conditions will have a pretty big impact.

Nice work.

JW

Thanks, the average annual S&P return over the last 10 years or so hovers right around 8%, can’t complain there. Hopefully the bull market continues!

The Green Swan

Martin - Get FIRE'd asap

Interesting. Having a million dollars a or more puts you in the top 5% in terms of wealth? That’s quite a telling statistic isn’t it when you consider that $1m isn’t a huge amount of money any more. I’m going to see if I can find a similar stat for this part of the world.

Martin - Get FIRE'd asap

Well here it is GS. I’m not sure if I’m reading this correctly so have included the URL for the Australian Bureau of Stats where I got this from.

If I am correct then Australian households with a net worth of $1mil or more is 3%!!

Wow, considering wages here are pretty good compared to other countries, and the resources industries (mining, gas, oil) have paid significantly high wages for a long time, the statistics paint a pretty sorry story.

Here’s the link http://www.abs.gov.au/ausstats/abs@.nsf/Lookup/by%20Subject/6523.0~2013-14~Main%20Features~Income%20and%20Wealth%20Distribution~6

Have a look and tell me if I have that correct.

Stockbeard

Doubling once again from 1 million to 2 would assume being able to save $100’000 a year + portfolio growth of 8% on average for 5 years.

You need big salaries + lots of trust in an aging bull market…

Good luck 🙂

JW

Ha thanks, I love that you did that quick math for me. We are currently doing over $100k in contributions so definitely need the markets to cooperate. We may not hit the 8% return over the next 5 years, as you point out we are a number of years into this bull market, but we should over the long-run. I’ll be sure to give updates along the way!

Thanks again for the comment!

The Green Swan

MyMoneyDesign

Excellent job on getting to $1M! I will have to check out your book and learn more closely how you got there. (I love reading personal success stories like that.) My wife and I are very close to hitting $1M within the next 5 years. We’re very excited!

PatientWealthBuilder

First and foremost great blog. The layout and design are very attractive and you’ve already got some pretty slick pop-ups and badges. We don’t need no badges! I actually have the Yakezie.com badge on my site which I display proudly.

Second – your journey is pretty cool. I’m curious if you did most of that through 401(k) contributions or in a personal after-tax brokerage account? My net worth is close to where you were after 3 years. It is very difficult to keep lifestyle inflation at a minimum.

JW

Yeah I see your Yakezie badge!:)

Mostly 401(k) contributions which we’ve been maxing out the last 4 years, but we’ve also been maxing out our IDEas and contributing the leftover to our taxable account.

I can tell you that keeping lifestyle inflation in check is key, but I know how difficult that can be especially when seeing friends and family spending money on nice things.

Thanks for the comment!

Travel Travel & Retire!

I am so glad I found you (via budgets are sexy) – I am on a very similar path to you, hoping to get to $1m in 4-5 years (end of year we should be at $360k see details here if interested https://traveltravelandretire.com/2016/08/07/plan-and-retirement-assumptions/ ). I love seeing real life examples of people that have ‘been there, done that’. I will continue to follow your progress for encouragement!

The difference i think is that I am a little more conservative on the ROI I can expect going forward given the crazy global situation, which means I just have to save more.

Are you still thinking 8% is realistic?

JW

I’m glad you found my blog too! I look forward to stopping by yours and following your story as well.

That’s great you are well on your path to a million! I still think 8% is a fair estimate for an all stock portfolio over the long term. Last few years have been sluggish but none of the macro economic issues make me think there will be fundamental changes resulting in a lower than 8% average. We’ll see though and if so I know we’ll adjust accordingly.

Thanks for sharing!

Financial Samurai

Fingers crossed for the bull market to continue for 10 more years! I’m not holding my breath, but am hoping for the best.

I used to think getting to $1M was the easiest, given all the energy we have. But getting to the second million really is so much easier once you have the capital.

Sam

JW

I would imagine it makes all the difference having that capital working for you, bringing in additional income. It’ll be nice one day when my investment portfolio brings in more income than I do! Thanks for stopping by, Sam.

Dominic @ Gen Y Finance Guy

Thanks for sharing your path to your first $1M in net worth.

I like the idea of doubling your net worth every 4 years. Like you mentioned, the early part of the journey is easy for this type of compounding, as long as you are focused and disciplined.

An emphasis on increasing your income and thus increasing your savings/contributions because a pretty big factor as your net worth grows. I am experiencing this currently. Our income has grown substantially from just a few years ago, and our savings rate keeps going up, as we keep our own lifestyle inflation checked.

Based on our 20 year plan to get to $10M, we projected to hit $1M in just shy of 3 years from now, and are projecting a net worth at the end of this year of $495K.

JW

Thanks, Dom! Glad you like the 4 year goal. Sounds like you are doing a good job of reaching that goal yourself and will need to continue to do so to reach you 20 year plan. That’s awesome! Keep up the good work.

Thanks for the comment, Dom!

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